Here’s what we know about the Panama Papers

Here’s what we know about the Panama Papers

NEW YORK — On Sunday (April 3), a group of global news organisations published articles based on a trove of leaked confidential documents from a law firm in Panama. They exposed how some of the world’s most powerful people were said to have used offshore bank accounts to conceal their wealth or avoid taxes.

The documents, known as the “Panama Papers”, named international politicians, business leaders and celebrities in a web of unseemly financial transactions, according to the articles, and raised questions about corruption in the global financial system. Many of the companies and figures named in the leak have denied in the strongest terms that they had broken any laws.

WHAT ARE THE PANAMA PAPERS?

The Panama Papers are documents — 11.5 million in all, or 2.6 terabytes of data — provided by an unnamed source to a German newspaper, Sddeutsche Zeitung, more than one year ago from the files of Mossack Fonseca, the law firm in Panama, described as the fourth-largest offshore law firm in the world.

Sddeutsche Zeitung shared the data with the International Consortium of Investigative Journalists. The consortium then shared the files with reporters from 100 news organisations around the world, including The Guardian, the McClatchy newspapers, Fusion and other outlets. The New York Times did not have access to the leaked documents.

Those news media outlets are expected to publish more articles based on the Panama Papers in the coming days.

WHAT ARE THE MOST SERIOUS ACCUSATIONS MADE BY THE ARTICLES?

The articles said nearly 215,000 companies and 14,153 clients were tied to Mossack Fonseca. They linked 143 politicians, their families and close associates — including 12 highly placed political leaders — to the use of tax havens to shield vast wealth.

Among those named were President Mauricio Macri of Argentina; President Petro O Poroshenko of Ukraine; Prime Minister Sigmundur David Gunnlaugsson of Iceland; the former interim prime minister and vice president of Iraq, Mr Ayad Allawi; King Salman of Saudi Arabia; the former emir of Qatar, Hamad bin Khalifa al-Thani, and its former prime minister, Hamad bin Jassim bin Jaber al-Thani; and Argentine soccer star Lionel Messi, according to the consortium.

The cellist Sergei Roldugin, a close friend of President Vladimir Putin of Russia, was also named in the documents. The Guardian described Mr Roldugin as being at the centre of a US$2 billion (S$2.7 billion) scheme “in which money from Russian state banks is hidden offshore”.

Mossack Fonseca also counted among its clients close associates of President Bashar Assad of Syria, according to the BBC, and eight current and former members of China’s Politburo. Dozens of influential donors and politicians in Britain have also been named, including Ian Cameron, the father of Prime Minister David Cameron, who ran an offshore investment fund that avoided paying taxes in the United Kingdom, according to The Guardian. Cameron died in 2010.

DO THE PANAMA PAPERS SHOW THAT ANY CRIMES HAVE BEEN COMMITTED?

It is not clear if the leaked documents show proof of criminal activity.

Countries around the world began investigations into the leaked data on Monday, including the United States, France, Germany, Australia, Austria, Sweden and the Netherlands.

Holding money in an offshore company is not illegal, although such financial arrangements can be used in illegal ways, for example to facilitate tax evasion or money laundering.

WHAT HAS MOSSACK FONSECA SAID ABOUT THE LEAKS?

In a lengthy statement to The Guardian, the Panamanian law firm defended its practises and appeared to threaten the news agency with legal action.

The firm said that it was “legal and common for companies to establish commercial entities in different jurisdictions for a variety of legitimate reasons” and maintained that it had “always complied with international protocols” to the best of its ability to ensure that companies it incorporated were not being used for illegal or illicit purposes.

But it said the news agency had obtained “unauthorised access to proprietary documents and information taken from our company.”

“Using information/documentation unlawfully obtained is a crime, and we will not hesitate to pursue all available criminal and civil remedies,” its spokesman, Mr Carlos Sousa, wrote.

WHAT HAS BEEN THE FALLOUT FROM THE LEAKS SO FAR?

One of the first major repercussions occurred on Monday in Iceland, where residents staged a large protest outside Parliament and called for the resignation of the prime minister.

Mr Gunnlaugsson’s name appeared in the leaked documents in connection with an offshore company he established in the British Virgin Islands with a partner, whom he later married. The leaks suggested that he had sold his shares of the company to his wife for US$1 just before a new law took effect that would have required him to report his ownership of it as a conflict of interest.

He said he would remain in office and said he had not concealed his assets or avoided paying tax.

Many of the other figures named in the leaks also have denied any wrongdoing. A spokesman for the Kremlin, Mr Dmitry Peskov, called the Panama Papers a case of “Putinophobia” and a plot to destabilise the country. The spokesman’s wife was also named in the documents as the owner of an offshore company.

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